LUKOIL to Reduce Prices for Some of its Motor Fuels

Excerpt from current edition of Russian Petroleum Investor


The LUKOIL Group of refineries in Russia reduced prices for motor gasoline, diesel and jet fuel in August 2008. Among other things, in the second half of August, the company’s plants reduced prices for AI-92 by 12 percent, AI-80 by 5 percent, diesel fuel by 5 percent and jet fuel by 5 percent, on average.

As reported earlier, in the first half of August, LUKOIL’s refineries reduced prices on average for diesel fuel by 7 percent, for fuel oil by 8 percent and for jet fuel by 4 percent. LUKOIL expects such pricing in the future will lead to considerable retail price decreases at company filling stations in a number of Russian regions. According to LUKOIL, expectations call for further reductions
in diesel fuel and motor gasoline prices in September.

In Russia, the LUKOIL Group includes four refineries located in Ukhta, Perm, Nizhny Novgorod and Volgograd, as well as two mini refineries in Urai and Kogalym (Western Siberia). In 2007, LUKOIL’s Russian refineries (including mini refineries) produced 11.4 million tons of diesel fuel, 10.6 million tons of fuel oil, 4.9 million tons of gasoline and 2.5 million tons of jet fuel.



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Russia Cuts Oil Exports to the Czech Republic

Excerpt from Russian Petroleum Investor by Inna Gaiduk, Editor

Russia has further reduced its oil deliveries to the Czech Republic, bringing total July cutbacks to 50 percent, senior Czech officials said, a disruption that is again calling into question Russia’s reliability as an energy supplier to Central and Eastern Europe. Supplies were reduced about 40 percent early in the month. A further cut later reduced the flow to half its pre-July level, officials said.

Russia’s oil pipeline monopoly, Transneft, has declined to give any indication of when full operations will resume through the Druzhba pipeline. The Czech Republic is unique among the countries of Eastern and Central Europe in its ability to cope with cutbacks of oil from Russia because it diversified its sources during the early 1990s. However, it still relies on Russia for much of its natural gas.

Transneft cut supplies in early July, a day after US Secretary of State Condoleezza Rice signed an accord with her Czech counterpart to deploy part of an antiballistic missile shield on Czech territory. Russia denied then that the decision to cut supplies from a contracted July volume of 500,000 tons to 300,000 tons had been in retaliation for the signing. Mikhail Barkov, Transneft vice president, said there were “technical and commercial reasons,” adding that two Russian producer companies, Bashneft and Tatneft, considered it more profitable to process the crude oil in Russia before exporting it.

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